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REAL - ESTATE NEWS FEED

OCTOBER 07

TO

OCTOBER 11

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HIGHLIGHTS

1. REAL-ESTATE

• Capitol TwinPeaks records increase in Sri Lanka real estate - Read more

• Hambantota Int’l Port makes phenomenal progress - Read more

• Home Lands Group acquires Rs. 364 m property in Malabe for apartment project

- Read more

• Sri Lanka property developer working to raise high-rise fire safety standards -

Read more

• Malaysian property expert Michael Yam highlights major emerging opportunities

in SL real estate - Read more

• Capitol TwinPeaks boosts expat confidence in Sri Lanka real estate - Read more

• Millennium Housing to build 400 houses in three locations in Sri Lanka - Read more

• Stand-alone hotels unviable in Sri Lanka due to high construction, capital costs -

Read more

• SMART REAL ESTATE: TOWARDS UNMET SOCIO-ECONOMIC NEEDS - Read more

• 447 Luna Tower celebrates topping up of tower on schedule - Read more

• Prime Grand, Ward Place Constructs 28th floor three months ahead of schedule -

Read more

• Doors open for Sri Lankan construction companies in Africa - Read more

• Light Rail Transit operations to commence in 2025 - Read more

• Star Class Hotel to invest US$ 5.2mn in 5-Star in Kandy - Read more

• PropTech to offer solutions in property issues - Read more

2. ECONOMY

• RIU launches report on excise taxation - Read more

• Fitch says lending rate caps may not support loan growth in short term - Read more

• EDB kicks off groundwork to develop wellness tourism strategy, national brand

for Sri Lanka - Read more

• Stocks, rupee firmer as presidential frontrunner files nomination - Read more

• Tourist arrivals drop sharply in September - Read more

• Contrary to Moody’s stance, Central Bank says lending caps credit positive for

banks - Read more

• ‘Lanka executes Rs. one trillion construction work annually’ - Read more

• Foreign investments record net inflow of US$ 44 mn in July - Read more

• Headline inflation 3.4 % in August - Read more

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1. REAL -ESTATE

• Capitol TwinPeaks records increase in Sri Lanka real estate

Capitol TwinPeaks, the flagship residential venture of the Sanken Group, located on the Beira

lakefront in Colombo 2, has recorded an increase in Sri Lankan expatriate interest in both the

residential project, as well as Central Colombo’s luxury apartment market segment.

Speaking with Sri Lankan expat and Group Managing Director, Dart Global Logistics, Charles

Wijesundera, said, “Sri Lanka afforded me the opportunity to build my career. Even after having

left the country more than 13 years ago, my love for this country has not diminished.”

Wijesundera migrated to Australia in 2006 with his family, after having cultivated a strong

foothold in the freight forwarding and logistics industry under his flagship company Dart Express

established in Sri Lanka in 1983.

Read more

• Hambantota Int’l Port makes phenomenal progress

Eighteen months to the formation of HIPG, the public private partnership between CMPort and

the Sri Lanka Ports Authority (SLPA), to manage the Hambantota International Port (HIP), the

company has made phenomenal progress.

They have successfully turned it around, bringing the port into the limelight and strategically

positioning it within the international ports & shipping industry.

Groups of potential investors are visiting the now thriving port to determine its forward

development plans and to see what synergies HIP would bring to the overall maritime map. The

first signs of visible progress were seen with the 9-storey administration building of the port, the

Hambantota Maritime Centre, becoming 95 percent occupied. The building is almost filled to its

capacity, with leading industry players renting office space.

Read more

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• Home Lands Group acquires Rs. 364 m property in Malabe for apartment project

Home Lands Skyline, the residential development arm of Home Lands Group has invested Rs. 364

million in an upmarket property of 6.5 acres in Malabe – Chandrika Kumaratunga Mawatha.

Malabe is an unmatched suburb of the commercial capital and is belonged to the eastward region

of Colombo District, which is at present demonstrating a highest property appreciation rate in the

country.

In view of catering to the booming demand for upper and middle-scale housing in Colombo’s

peripheries, Home Lands Skyline expects to deploy the newly arrived property for a fresh

residential venture consisting of 336 luxury and semi-luxury residential parcels.

Read more

• Sri Lanka property developer working to raise high-rise

fire safety standards

Sri Lankan property developers are working with government authorities to improve fire safety

standards in new high-rise buildings mushrooming in Colombo and other towns, an official said.

Nayana Mawilmada, sector head of John Keells Properties, said concerns over fire hazards in high-

rise buildings and lack of capacity of local authority fire fighters to tackle them were valid and

being addressed.

“It is an evolving area. We are working hard with the regulators to get the best possible

regulations,” he told a forum on the property market.

“It is an area where the government does need to step up its act, where there is a requirement for

more policy focus.”

Read more

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• Malaysian property expert Michael Yam highlights major emerging opportunities in SL real estate

The future of Sri Lanka’s economic development could very likely hinge on how domestic policies

towards real estate evolve, particularly with respect to supporting the massive demand for

vertical living in Colombo and its suburbs.

These were some of the key insights which emerged out of a Breakfast Meeting jointly hosted by

John Keells Properties and DFCC Bank at the Cinnamon Grand Hotel on 24 September.

Featuring insightful presentations by guest speakers, Malaysia’s Impetus Alliance Advisors CEO

and Managing Director Michael Yam and Impetus Alliance Advisors Director Shaun Mok as well

as a panel discussion with John Keells Properties Sector Head Nayana Mawilmada, the breakfast

meeting provided an exclusive group of DFCC Premier customers with an unprecedented

overview of current challenges, potential solutions and latent investment opportunities in Sri

Lankan real estate.

Read more

• Capitol TwinPeaks boosts expat confidence in Sri Lanka real estate

Capitol TwinPeaks, the flagship residential venture of the Sanken Group, located on the Beira

lakefront in Colombo 2, has recorded an increase in Sri Lankan expatriate interest in both the

residential project as well as Central Colombo’s luxury apartment market segment.

Sri Lankan expat and Dart Global Logistics Group Managing Director Charles Wijesundera said:

“Sri Lanka afforded me the opportunity to build my career. Even after having left the country

more than 13 years ago, my love for this country has not diminished.”

Wijesundera migrated to Australia in 2006 with his family, after having cultivated a strong

foothold in the freight forwarding and logistics industry under his flagship company Dart Express,

established in Sri Lanka in 1983. His career foundation in Sri Lanka, keen business acumen and

humility is what has solidified his professional and personal success thus far. His family resides

in Sydney, Australia while he operates the Dart Global Logistics Group from Singapore.

Wijesundera frequents Sri Lanka every quarter and has every intention to return one day. He

opines that Sri Lanka is a blessed country that provides the best of both worlds in terms of its

beauty and convenience in lifestyle. It is for this reason that his “spirit is forever attached to Sri

Lanka.”

Read more

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• Millennium Housing to build 400 houses in three locations in Sri Lanka

i Lanka’s Millennium Housing Developers Plc said it was planning 400 houses in three locations

as there was unfulfilled demand for housing in the greater Colombo area driven by migration.

“Despite strong demand, residential construction remained weak, as the total number of housing

approvals in Greater Colombo fell year on year, Millennium Housing Chairman Harshith

Dharmadasa said.

“A severe shortage of low-end housing was evident caused by internal migration from rural to

urban areas.

“Compared to the housing requirement of 100,000 units per annum, housing construction was

only around 12,500 units per annum.

Read more

• Stand-alone hotels unviable in Sri Lanka due to high

construction, capital costs

Standalone hotels are not viable in Sri Lanka due to excessive construction costs, high domestic

interest rates and depreciation, an international leisure executive has said.

“It may be a nice thing to have a standalone hotel, for ego, but in investment perspective, I would

say run away,” Dilip Rajakarier, chief executive of Thailand based Minor Hotel group said.

Rajakarier was speaking at the Cinnamon Future of Tourism Summit 2019 in Colombo.

Sri Lanka taxes steel to high levels to give super profits to politically connected ‘domestic

producers’. Other construction materials including tiles, electrical and aluminum fittings are also

taxed, according to critics. Some taxes have been reduced in recent years.

Different types of steel are taxed at 30 and 15 percent import duty, with 15 percent value added

tax, 7.5 percent, 2 percent nation building tax and a 15 rupee per kilo cess generating taxes on

taxes.

Read more

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• SMART REAL ESTATE: TOWARDS UNMET SOCIO-ECONOMIC NEEDS

Dr. Upuli Perera, (Conference Chair, ICREMV- 2019), Senior Lecturer, Department of Estate

Management and Valuation, University of Sri Jayewardenepura.

The 3rd International Conference on Real Estate Management and Valuation (ICREMV)

2019organised by the Research and Professional Development Centre of Department of Estate

Management and Valuation (DEMV), University of Sri Jayewardenepura in collaboration with

Government Valuation Department, Urban Development Authority, Colombo Municipal Council,

Sri Lanka Institute of Valuers’ Royal Institute of Chartered Surveyors Sri Lanka and

UniversitiSains Malaysia will be held at the Waters Edge, Battaramulla on October 8.

Read more

• 447 Luna Tower celebrates topping up of tower on schedule

Philip Weeraratne- Principal Architect, PWA Architects, Eraj S Rajapakse - Senior Manager –

Projects, Asia Capital PLC, SandunHettig, Joint Chief Operating Officer, Asia Capital PLC, Misako

Tanka Directors, Asia Leisure Travels Pvt Ltd, Toshiaki Tanaka Director, Asia Capital PLC, Stefan

Abeyesinhe Executive Director, Asia Capital PLC, Peter Fernandopulle Financial Consultant,

Belluna Lanka (Pvt) Ltd, Mervyn Fernando Executive Director, Sanken Constructions (Pvt) Ltd,

Reyhan Morris Joint Chief Operating Officer, Asia Capital PLC

447 Luna Tower recently marked the topping up of its tower with a traditional ceremony. The

project is part of a key multi-million-dollar investment portfolio in Sri Lanka by Belluna Co. Ltd

and Asia Capital PLC.

Belluna Co. Ltd is reputed as one of Japan’s foremost real-estate giants with a strong track record

and global presence. Scheduled for completion in 2020, the iconic luxury project offers an

unrivalled value proposition on account of its impressive project partners, aesthetics, attractive

pricing and strategic location in the heart of Colombo at Union Place in close proximity to the

commercial hub, leading schools, shopping area and hospitals.

447 Luna Tower is poised to be the only condominium in the heart of the city to strike a perfect

balance of elegant design, luxury living and convenience of location at a competitive price.

Committed to make upscale living affordable, the apartments are priced in Sri Lankan Rupees

(LKR).

Read more

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• Prime Grand, Ward Place Constructs 28th floor three months ahead of schedule

Sri Lanka’s premier real-estate company Prime Group’s flagship ultra-luxury project, Prime

Grand, Ward Place, has commenced construction of their 28th floor, symbolising the start of their

Executive Level floors. Slated to be ready for occupancy by December 2021, the project’s

construction partner Maga Engineering announced that the project progress is already three

months ahead of schedule. Prime Grand is set to be the epitome of prestigious living in Sri Lanka

in the most iconic and sought-after neighbourhood in Colombo 7 — Ward Place.

Bearing the prestigious address, No.64, Ward Place, Colombo 07, Prime Grand sprawls over an

acre of real estate and is the only high rise in Colombo 7, promising uninterrupted views and

privacy. The prominent street named after British Governor Sir Henry George Ward, is one of the

most coveted locations in the country. The street is host to the heritage and history of some of Sri

Lanka’s most celebrated personages.

Read more

• Doors open for Sri Lankan construction companies in Africa

Sri Lankan construction companies participated at the 16th Ethio-Con International Construction

Exhibition held in Addis Ababa, Ethiopia from 24-27 September, securing new business

opportunities in the African continent.

The international exhibition which attracted over 125 African construction companies was

inaugurated by Minister of Construction and Urban Development of Ethiopia Eng. Aisha

Mohammed Mussa. Addressing the inaugural ceremony, the Minister highlighted that

opportunities are vast for foreign construction firms in Ethiopia and Africa. She further stated

that the Government of Ethiopia provides attractive incentives to foreign construction

companies.

Addressing the inaugural session, Ambassador of Sri Lanka to Ethiopia and Permanent

Representative to the African Union Commission, Sumith Dassanayake stated that Sri Lanka has

a very strong construction industry.

Read more

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• Light Rail Transit operations to commence in 2025

Colombo Light Rail Transit (LRT) Project will be ready for commissioning by end of 2024

and for commercial operation by early 2025.

The total cost of the project is US D 2.2 billion, of which USD 1.8 billion will be provided

by the Japan International Cooperation Agency (JICA). The government of Sri Lanka

requested JICA to introduce the LRT model due to its versatility to run in all possible types

of alignment.

The feasibility study on LRT was completed in 2017. A detailed study was awarded to

joint venture consortium led by the Oriental Consultants Global.

“Currently, detailed designs and bidding documents are being prepared and it should be

ready for tender by April next year. We’re planning to commence the construction once

documents are tendered and approved. Subsequently, we will select the successful

bidders by end of 2020 or early 2021.”

Read more

• Star Class Hotel to invest US$ 5.2mn in 5-Star in Kandy

The Board of Investment of Sri Lanka signed an agreement with Star Class Hotel (Pvt)

Ltd., to set up 67 room 5-star hotel which will be located at Mavilamada Road, Kandy.

The agreement was signed by Mangala Yapa, Chairman of the Board of Investment of Sri

Lanka and Mohamed Nazar Mahamed Rizan, Managing Director of the Company.This new

project in Kandy will create

61 new employment opportunities and represents an investment of US$5.2 million.

Mohamed Nazar Mohamed Rizan provided further information on his project and its

importance to the tourism industry. “This is a project for a 5-Star hotel in Kandy, which

is my hometown and a very beautiful city.

Read more

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• PropTech to offer solutions in property issues

PropTech or property technology will facilitate the revolution of the real estate sector

and offer solutions to numerous issues facing the industry.

PropTech, describes any technology, usually of a digital nature, deployed for the real

estate space. Real estate is one of the least technologically advanced industries in the

world.

However, it has become an ideal place for investment and entrepreneurship development

over the last couple of years.

Moreover, demands of investors and stakeholders in the real estate industry has become

more sophisticated in recent times, making the need for innovation and technology the

very key in the operationalization of the industry in modern society.

Read more

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2. ECONOMY

• RIU launches report on excise taxation

RIU Sri Lanka launched its first ever economic report focusing on excise taxation this week.

Targeting policy makers who are key to decision making in mapping a progressive economic

journey for the country, this pioneering focus on tobacco taxation delves in depth into the impacts

of the current tobacco tax regime. Guest of honour at the event was Minister of Economic Reforms

and Public Distribution Dr Harsha De Silva who also launched the Thinking Citizen Platform,

developed by RIU Sri Lanka.

The Thinking Citizen Platform is a public online forum that will discuss controversial issues or

those that receive less attention in mainstream media, giving society a voice and a presence to

discuss topics of vital social and economic interest.

“Taxation is a vital component of the fiscal policy in any country,” explained CEO of RIU Sri Lanka

Roshan Madawela. “Given the significant fiscal deficit in Sri Lanka, closing this deficit is a priority

for the government. Taxation is key to making this happen. Recognising this, the RIU Economic

Forum and our Report is focusing on the country’s performance in relation to the taxation policy.”

He expanded that this year RIU Sri Lanka placed the spotlight on an industry sector that is highly

influential in the economic framework but is less discussed due to the market environment it

operates in. “We intend having a series of presentations to relevant stakeholders, including policy

makers which shed light on the impacts of taxation in the macro picture.”

Read more

• Fitch says lending rate caps may not support loan growth in short term

The lending rate caps on banks may not yield the desired effect of stimulating credit demand in

the short term, as the root cause of the problem lies not with the rates but with the borrower

sentiments and subdued economic activity, said Fitch Ratings.

In a note titled ‘Sri Lanka bank lending rate cap may not support loan growth’, released yesterday,

the rating agency said notwithstanding the order to lower the lending rates, the banks might

extend less credit to the risky borrowers if they cannot price their loans at least up to their hurdle

or the minimum rate of return.

Read more

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• EDB kicks off groundwork to develop wellness tourism strategy, national brand for Sri Lanka

The Sri Lanka Export Development Board (EDB) kicks off the groundwork to develop an

international wellness tourism strategy and a brand development initiative within a year, to

position the country as a leading player in the US $ 2.6 trillion global wellness tourism industry,

under the five-year National Export Strategy (NES).

In the first phase, the EDB procured the services of international consulting firm, Linser

Hospitality GMBH, based in Austria, to undertake a ‘Rapid Assessment of the Potential Wellness

Tourism Industry in Sri Lanka’ with financial and technical assistance from Australia’s Market

Development

The lead consultant and Linser Hospitality GMBH Managing Director Dr. Franz Linser, who is on

a five-day visit to Sri Lanka, yesterday conducted a stakeholder discussion with key industry

players at the EDB premises.

Read more

• Stocks, rupee firmer as presidential frontrunner files nomination

Sri Lankan stocks and rupee closed firmer yesterday after presidential frontrunner Gotabaya

Rajapaksa, who faced uncertainty over his candidature, filed a nomination early in the day.

Investor confidence returned after the former wartime defence chief, who is seen as a strong

leader among the 35 candidates, filed nominations to contest in Sri Lanka’s presidential election

scheduled for November 16.

However, investors were cautious as they waited for policies of the political parties.

Rajapaksa faced a legal case challenging his Sri Lankan citizenship, but Sri Lanka’s Appeal Court

on Friday dismissed the petition, removing a major barrier he faced

The benchmark stock index ended 0.33 percent firmer at 5,708.92, further moving away from its

lowest level since July 22 hit on Thursday. The bourse fell 1.42 percent last week. So far this year,

the index has dropped 6 percent.

Read more

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• Tourist arrivals drop sharply in September

The total number of international tourist arrivals to Sri Lanka during September 2019 was

108,575 showing a big drop in arrivals from 149,087 in September 2018.

The arrival figure of 108,575 is also the lowest for 2019 expect for months of May and June where

the tremors of the Easter Sunday blasts impacted badly. Last month, the largest source markets

for tourists were India, followed by China and the United Kingdom. Almost 98 % of tourists

travelled by air to Sri Lanka. As of September 30, 2019, 1,376,312 tourists had visited Sri Lanka

and the annual projection for the year 2019 is 2.1 million international tourists arrival to the

country according to Sri Lanka Tourism Development Authority (SLTDA)

Read more

• Contrary to Moody’s stance, Central Bank says lending caps credit positive for banks

The Central Bank yesterday disputed Moody’s Investors Service’s claim that the recently

announced lending rate cut was credit negative for banks and said the rating agency had not taken

into account the complete information set to arrive at its conclusion.

The Central Bank said the lending interest rate caps announced last week in fact would be credit

positive for banks as they would help banks to address the issue of rising non-performing loans

(NPLs) with the gradual pickup in economic activity, amid increased demand for credit.

The Central Bank stressed that the lending caps were imposed after taking a number of measures

over the past 11 months to ease monetary policy to stimulate economic growth, amid well-

anchored inflation expectation.

Read more

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• ‘Lanka executes Rs. one trillion construction work annually’

Sri Lanka has executed Rs. one trillion worth of construction work annually during the past three

years, said Minister of Megapolis and Western Development Patali Champika Ranawake.

He was speaking at the Chamber of Construction Industry Sri Lanka organized ‘Build Sri Lanka

Housing and Construction International Expo 2020’ launch, scheduled for next May. “Half of Sri

Lanka’s growth should be attributed to the contributions made from the construction industry.”

Ranawake said that most of the construction activities were seen in the apartment and hotels

sector. The Minister also said that 6 million square feet of office space too were added to meet the

rising demand for this segment.

He said that the UDA too, have been actively involved in adding infrastructure and beautifying the

city. “We are now in the process of converting the much talked of Meetotamulla Garbage dump in

to a green park.”

Read more

• Foreign investments record net inflow of US$ 44 mn in July

Worker remittances grew by 1 per cent, year-on-year, to US$ 626 million in July 2019. On a

cumulative basis, worker remittances declined by 8.2 per cent to US$ 3,895 million during the

first seven months of 2019 in comparison to the corresponding period of 2018.

Foreign investments in the CSE, including primary and secondary market transactions, recorded

a net inflow of US dollars 44 million during the month of July 2019. Accordingly, financial flows

to the CSE recorded a net inflow of US dollars 34 million during the first seven months of 2019.

Further, long term loans to the government recorded a net outflow of US dollars 86 million during

July 2019. Gross official reserves stood at US$ 8.3 billion by end July 2019, equivalent to 4.9

months of imports.

Meanwhile, total foreign assets, which consist of gross official reserves and foreign assets of the

banking sector amounted to US dollars 11 billion as at end July 2019, which was equivalent to 6.5

months of imports.

Read more

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• Headline inflation 3.4 % in August

Headline inflation as measured by the year-on-year change in the National Consumer Price Index

(NCPI, 2013=100)1 increased to 3.4 per cent in August 2019 from 2.2 per cent in July 2019.

The low base that prevailed in the corresponding month of the previous year and the monthly

increases of prices of items in both food and Non-food categories contributed to this increase.

Meanwhile, in August 2019, year-on-year food and non-food inflation recorded 0.6 per cent and

5.6 per cent respectively. The change in the NCPI measured on an annual average basis increased

marginally to 2 per cent in August 2019 from 1.9 per cent in July 2019. Monthly change of NCPI

recorded 0.2 per cent in August 2019 and it was due to the price increases observed in the items

of both Food and Non-food categories. The National Consumer Price Index (NCPI, 2013=100) is

compiled by the Department of Census and Statistics.

Read more